Lack of transparency hindering foresight in the planning and execution of the budget

László Domokos

Public Finance Quarterly, 2010, vol. 55, issue 4, 739-745

Abstract: The global financial crisis hit the real economy and hence, public finances of most countries in the world so hard that even national audit offices, which are responsible for the regular and effective spending of public funds, had to ask themselves how they could assist in preventing the outbreak or at least the deepening of eco nomic crises and in mitigating their the negative effects. The quick response of the International Organization of Supreme Audit Institutions (INTOSAI) reflects this sense of responsibility: as early as its first meeting in November 2008, the Governing Board set up a working group to examine the challenges posed by the global financial crisis for state audit offices. Of the partial report that has been recently discussed in London, I would like to highlight one thought only: national audit offices are a part of the respective immune systems of individual countries. Accordingly, by being independent and vested with adequate powers, as well as by exercising such powers, the state audit office can contribute significantly to safeguarding the soundness of the economy, financial system and public finances of a country. In my opinion, a state audit office fulfils its role of being a part of the immune system prima rily by drawing attention to disorder and demanding order; in other words, demanding the transparency of public finances and the regular and effective use of public funds. Order, in turn, creates value. Why? Because order improves the chance for clear-sightedness. Clear-sightedness is precisely what would have been needed most in a crisis situation.

Date: 2010
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